Have you been paying attention to shares of Parsons (PSN)? Shares have been on the move with the stock up 4.3% over the past month. The stock hit a new 52-week high of $112.19 in the previous session. Parsons has gained 75.4% since the start of the year compared to the 16.8% move for the Zacks Business Services sector and the 29.1% return for the Zacks Technology Services industry.

What's Driving the Outperformance?

The stock has a great record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on October 30, 2024, Parsons reported EPS of $0.95 versus consensus estimate of $0.79 while it beat the consensus revenue estimate by 11.35%.

Valuation Metrics

Parsons may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company has run ahead of itself.

On this front, we can look at the Zacks Style Scores, as they provide investors with an additional way to sort through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. The idea behind the style scores is to help investors pick the most appropriate Zacks Rank stocks based on their individual investment style.

Parsons has a Value Score of C. The stock's Growth and Momentum Scores are B and C, respectively, giving the company a VGM Score of B.

In terms of its value breakdown, the stock currently trades at 34.4X current fiscal year EPS estimates, which is a premium to the peer industry average of 25.6X. On a trailing cash flow basis, the stock currently trades at 32.6X versus its peer group's average of 11.5X. Additionally, the stock has a PEG ratio of 2.14. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.

Zacks Rank

We also need to consider the stock's Zacks Rank, as this supersedes any trend on the style score front. Fortunately, Parsons currently has a Zacks Rank of #2 (Buy) thanks to rising earnings estimates.

Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Parsons passes the test. Thus, it seems as though Parsons shares could have potential in the weeks and months to come.

How Does PSN Stack Up to the Competition?

Shares of PSN have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is Distribution Solutions Group, Inc. (DSGR). DSGR has a Zacks Rank of # 2 (Buy) and a Value Score of B, a Growth Score of A, and a Momentum Score of F.